The Department of Justice has announced charges against hundreds of individuals for COVID-19 relief fraud following an operation conducted by federal, state, and local law enforcement agencies. Many of those facing charges have ties to organized crime, according to the DOJ. In one case, authorities allege that the pandemic relief aid was used to pay for a murder.
The DOJ has announced charges against over 300 defendants in these cases who allegedly stole more than $830 million from the federal government by making fraudulent claims. In this article, a Chicago criminal defense attorney will discuss pandemic relief fraud, how it works, and prosecutors’ efforts to hold those who stole money accountable for their actions.
Understanding COVID-19 Relief Fraud
During the pandemic, the federal government offered money to small businesses to help protect the companies and their employees from the economic pause placed on the economy. The small businesses would petition the government for relief aid, and the government would disburse a forgivable loan to the small business. The money was supposed to go toward protecting payroll and ensuring that employees had some income while the government was shut down. In many cases, however, small business owners would lie about the number of employees they had in order to get more money from the federal government. In other cases, the corporation filing the petition only existed on paper and was not an active business at the time it applied for pandemic relief money. The money was earmarked for specific expenditures.
In these cases, the government disbursed the money without checking deeply into the companies that were requesting aid. However, they went back over the applications after the fact and are now prosecuting cases related to fraudulent petitions or petitions that made fraudulent claims on the applications.
The situation is a mess. Nearly 3,200 defendants have been charged nationwide for pandemic relief fraud, including a Florida state lawmaker who pleaded guilty to the charges. In that case, the defendant was accused of lying on applications for federal pandemic relief to obtain more than $150,000 from the Economic Injury Disaster Loan program.
Federal Authorities are Aggressively Pursuing Charges
Federal authorities say there is “no end in sight” to pandemic relief prosecutions. They have already seized $1.4 billion in pandemic relief money and filed charges against those who fraudulently applied for assistance. In these cases, the money was disbursed by the federal government without due diligence into the veracity of the claims made on the applications. They have since gone back and are using forensic accountants to determine if fraud has been committed.
In these cases, the government must establish that the fraud was committed intentionally. You cannot accidentally commit fraud. The government must prove that you knowingly lied on the applications for pandemic relief. It is unclear how many of these cases will result in successful prosecution. But as of right now, several have been convicted.
Talk to a Chicago Criminal Defense Attorney Today
If you have been charged with pandemic relief fraud in Cook County, call Chicago criminal defense attorney David Freidberg today at (312) 560-7100. We can help defend you against the charges and ensure that you’re treated justly by eager federal authorities.